Augmented and virtual realities: disrupting or enhancing your business

October 4, 2017

Dr Calie Pistorius and John Connolly

The impact of technological change inherently presents strategic business risks, opportunities and threats. All companies, their customers and suppliers rely on technology in one way or another. This includes the technologies underpinning their products and services as well as their operations and logistics. Technologies also continuously change – some incrementally over a long period, others swiftly and abruptly. Ultimately old and mature technologies are replaced by newer technologies. On the one hand this presents great opportunities for companies to be a disruptor. However, the possibility that the technologies your company (or its suppliers and customers) rely on will be disrupted is also real. These are strategic business risks which cannot be ignored. Instead, they should be managed as part of innovation and risk strategies.

Emerging technologies have the potential to disrupt not only companies, but entire industries. A disrupted industry is characterised by new value propositions and new business models. Very often, new entrants become the market leaders, coming from different industries than the one they are disrupting. Sometimes they represent a new class of ‘tech’ competitors not burdened by legacy ‘assets’ to build competitive advantage, such as fintechs, insurtechs and edtechs (financial, insurance and educational technology). Recall the demise of Kodak, which followed its core technologies into obsolescence and finally oblivion. Juxtaposed against this, is the rise of new platform-based success stories such as AirBnB, Amazon and Tesla.

Digital disruption is one of the most significant global forces, fuelled by a number of emerging and disrupting technologies including mobile, cloud and wifi, big data, analytics, blockchain, artificial intelligence and machine learning. A number of other emerging technologies are digitally enhanced, leading to ‘smart’ products, including drones, 3D printing, biotechnology, autonomous vehicles, robotics and the internet of things. Augmented Reality (AR) and Virtual Reality (VR) are two emerging technologies which bridge the physical and digital worlds, and which have the potential to disrupt a wide range of industries and companies as well as the nature of work, skills requirements and jobs.

Augmented Reality uses digital technology to enhance the way we perceive the real world. Additional information is overlaid onto our (literal) view of the real world by displaying it on a ‘lens’ through which we view the world, such as a mobile device, smart AR glasses (think Google Glass) or the windshield of a vehicle. Many people had their first exposure to AR through the Pokèman game, where players looked through their mobile phones to see the (fictional) Pokèman characters they were searching for displayed on the screens and overlaid onto the view of the real world.

In addition to its obvious use in gaming applications, AR is rapidly finding its way into a number of real-world applications. Consider the following examples:

A surgeon operating on a patient can see data about the area she is operating on projected onto her AR glasses, including real-time information on the patient’s vital signs and images about the prosthetics which are about to be implanted.

A construction worker looks at a wall through his AR glasses, and sees the pipes, cables and reinforcement hidden behind the surface.

A driver driving at night can see pedestrians and animals on the side of the road (not visible to the eye in the dark) projected onto the windscreen of their vehicle, courtesy of the car’s infrared sensors which can detect them. Additionally the names of streets and buildings are overlaid as the driver looks at them through the windscreen.

Looking through AR glasses, a mechanic servicing an engine can see relevant real-time information pertaining to the parts being replaced, as well as the procedures to do so in text, image and video format.

An insurance claims adjuster looks at damage to property through AR glasses and sees overlaid images of what the property looked like before the damage.

A visitor in a museum points her mobile phone at an object. The AR app recognises the object and provides more information about it, including perhaps a short video clip.

Virtual Reality, on the other hand, embeds us in a digital simulation of the real word. A VR headset is donned, through which the user then not only ‘sees’ a graphic representation of the world, but is immersed into a 3D virtual world – ‘as if she was there’. The simulated world is interactive and responds to actions from the user, enhanced by sound and tactile responses.

The simulation ability of VR presents many useful applications, for example:

VR environments are excellent training platforms. A cancer radiation facility can be simulated, allowing radiographers to be trained before they work with real patients. Firefighters can be trained to enter smoke-filled rooms by simulating the effects of a burning building. Maintenance technicians on offshore wind pylons can be trained in VR environments before setting out for the hostile conditions of the North Sea.

Drivers of vehicles, such as cars, trains, airplanes and forklifts, can be trained and tested with VR. In these environments, it is possible to simulate and train for dangerous conditions and even accidents, without the trauma and damage of a real disaster. Based on advanced driving skills demonstrated in a VR simulator, an insurance company can decide to adjust the driver’s insurance premiums.

Various options of a new building can be configured digitally, allowing owners, designers and builders to ‘walk around’ a 3D VR simulation of the building whilst it is being designed. Similarly, VR allows us to ‘be in and experience’ ancient buildings which no longer exist, but can be reconstructed digitally.

AR and VR are emerging technologies which have moved out of the lab and niche gaming applications, and are rapidly entering mainstream applications in many sectors and industries. They are continuously being improved, leading to higher performance, cost reductions and more applications.

When emerging technologies with this potential transformative impact reach the stage where AR and VR is now, it is time for companies in all industries to take very serious notice. The forces of ‘creative destruction’ are in play. New opportunities, companies and industries as well as jobs will be created, but at the same time, others will become obsolete and phase away. These technologies will disrupt industries and companies, and no one can expect to be immune. With disruptive technologies, the disruptors usually have the advantage – they are the ones who anticipate the technological future and proactively take action.

Author Biography

Dr Calie Pistorius and John Connolly.John Connolly is the Managing Director of the C4DI, a technology business incubator in Hull focusing on digital innovation. Dr Calie Pistorius is the Chief Executive of DeltaHedron Ltd (which has its offices in the C4DI), a consulting firm specialising in the management of technological innovation and the impact, opportunities and risks presented by emerging technologies.